Return to the figure above. Note that it's 99.9%, not 99%.
Paul Krugman, in the important New York Times essay reprinted below, says "We are the 99%" is an admirable slogan that nonetheless aims too low. It should be altered to specify the considerably higher figure of 99.9%, nine-tenths of 1% higher. That is not an insignificant difference, nor does that difference represent a small number of us. About 2,814,000, give or take a few.
Put another way, Krugman demonstrates with reliable data that 0.1% of the American population, about 312,000 people today, have accumulated, possess and show no measurable intent to relinquish, 99.9% of "our" nation's wealth. After taxes. That is economic inequality — and the stuff of oligarchy rather than genuine democracy — on a scale unequaled in American history.
"We are the 99.9%" is not as catchy a slogan as "We are the 99%," but it makes a helluva difference in the quality of a lot of Americans' lives, measured in material well-being and access to government, education and health care. It also suggests that democracy in the United States is largely a fiction, a fig leaf imposed upon a working oligarchy. Does it mean that elections are meaningless, that freedom of expression and freedom of religion are non-existent? No, it does not.
It does — or should — raise serious concern that the third and fourth freedoms Franklin D. Roosevelt described and advocated 70 years ago for the United States and "everywhere in the world," freedom from want and freedom from fear, are deeply endangered species right here at home and indeed everywhere in the world. We must disenthrall ourselves, devote ourselves to their protection and nourishment for the 100%.
The Occupy Wall Street movement represents something new in America, even while it bears some similarity to earlier Gilded Ages. It's not surprising that we don't yet understand it well. The analogies ready at hand in the media don't apply. Our ready responses, pro or con, approving or hostile, are inapplicable, or only very partially applicable. The movement may fail. The most recent news of its birthing ground in Zuccoti Park is not encouraging. The movement may succeed. If it does, some of the credit, ironically, should go to the Republican party, which, as John Feffer of the Institute for Policy Studies writes, "has been so extreme in its defense of the 1 percent – actually the 0.1 percent, as Paul Krugman points out – that it has effectively seceded from the country to create a confederacy of cupidity."
Of this only we may be sure: We are watching — or seeking ways to nourish or undermine — something of potentially great consequence.
Krugman does his best to suggest some reasons why the movement should succeed. Your attention will be repaid.
We Are the 99.9%
By PAUL KRUGMAN
November 24, 2011
“We are the 99 percent” is a great slogan. It correctly defines the issue as being the middle class versus the elite (as opposed to the middle class versus the poor). And it also gets past the common but wrong establishment notion that rising inequality is mainly about the well educated doing better than the less educated; the big winners in this new Gilded Age have been a handful of very wealthy people, not college graduates in general.
Paul Krugman
If anything, however, the 99 percent slogan aims too low. A large fraction of the top 1 percent’s gains have actually gone to an even smaller group, the top 0.1 percent — the richest one-thousandth of the population.
And while Democrats, by and large, want that super-elite to make at least some contribution to long-term deficit reduction, Republicans want to cut the super-elite’s taxes even as they slash Social Security, Medicare and Medicaid in the name of fiscal discipline.
Before I get to those policy disputes, here are a few numbers.
The recent Congressional Budget Office report on inequality didn’t look inside the top 1 percent, but an earlier report, which only went up to 2005, did. According to that report, between 1979 and 2005 the inflation-adjusted, after-tax income of Americans in the middle of the income distribution rose 21 percent. The equivalent number for the richest 0.1 percent rose 400 percent.
For the most part, these huge gains reflected a dramatic rise in the super-elite’s share of pretax income. But there were also large tax cuts favoring the wealthy. In particular, taxes on capital gains are much lower than they were in 1979 — and the richest one-thousandth of Americans account for half of all income from capital gains.
Given this history, why do Republicans advocate further tax cuts for the very rich even as they warn about deficits and demand drastic cuts in social insurance programs?
Well, aside from shouts of “class warfare!” whenever such questions are raised, the usual answer is that the super-elite are “job creators” — that is, that they make a special contribution to the economy. So what you need to know is that this is bad economics. In fact, it would be bad economics even if America had the idealized, perfect market economy of conservative fantasies.
After all, in an idealized market economy each worker would be paid exactly what he or she contributes to the economy by choosing to work, no more and no less. And this would be equally true for workers making $30,000 a year and executives making $30 million a year. There would be no reason to consider the contributions of the $30 million folks as deserving of special treatment.
But, you say, the rich pay taxes! Indeed, they do. And they could — and should, from the point of view of the 99.9 percent — be paying substantially more in taxes, not offered even more tax breaks, despite the alleged budget crisis, because of the wonderful things they supposedly do.
Still, don’t some of the very rich get that way by producing innovations that are worth far more to the world than the income they receive? Sure, but if you look at who really makes up the 0.1 percent, it’s hard to avoid the conclusion that, by and large, the members of the super-elite are overpaid, not underpaid, for what they do.
For who are the 0.1 percent? Very few of them are Steve Jobs-type innovators; most of them are corporate bigwigs and financial wheeler-dealers. One recent analysis found that 43 percent of the super-elite are executives at nonfinancial companies, 18 percent are in finance and another 12 percent are lawyers or in real estate. And these are not, to put it mildly, professions in which there is a clear relationship between someone’s income and his economic contribution.
Executive pay, which has skyrocketed over the past generation, is famously set by boards of directors appointed by the very people whose pay they determine; poorly performing C.E.O.’s still get lavish paychecks, and even failed and fired executives often receive millions as they go out the door.
Meanwhile, the economic crisis showed that much of the apparent value created by modern finance was a mirage. As the Bank of England’s director for financial stability recently put it, seemingly high returns before the crisis simply reflected increased risk-taking — risk that was mostly borne not by the wheeler-dealers themselves but either by naïve investors or by taxpayers, who ended up holding the bag when it all went wrong. And as he waspishly noted, “If risk-making were a value-adding activity, Russian roulette players would contribute disproportionately to global welfare.”
So should the 99.9 percent hate the 0.1 percent? No, not at all. But they should ignore all the propaganda about “job creators” and demand that the super-elite pay substantially more in taxes.